A new bipartisan bill introduced on Wednesday would ban US government officials from using China-based crypto companies, China’s digital yuan, and prevent them from using the world’s largest stablecoin, Tether (USDT).
The Creating Legal Accountability for Rogue Innovators and Technology Act (CLARITY) seeks to ensure that the country’s “foreign adversaries… do not have a backdoor to access critical security intelligence and Americans’ private information,” according to the bill’s creators (via CoinDesk). US Representatives Zach Nunn (R-Iowa) and Abigail Spanberger (D-Va.) introduced the bill on Wednesday.
If passed, CLARITY would block government officials from conducting business with iFinex, Tether’s sister company. The bill comes amid growing awareness that the crypto industry is dependent on China. As Protos recently reported, China has generated more revenue for the world’s largest crypto firms than any other country — including Tether, Bitmain, Canaan, Binance, OKCoin, Huobi, OKX, Ebang, and many more.
Even when companies leave China, they soon sneak back in due to the lure of lucrative business. Binance still earns one-fifth of its business from China, for example.
Read more: Like it or not, crypto depends on China
American lawmakers are becoming increasingly aware of the crypto industry’s dependence on China — and are now taking steps to counteract the risks. CLARITY comes at a pivotal moment, as China’s struggling economy can have serious knock-on effects on the crypto industry. The bill would require the US Secretary of the Treasury, Secretary of State, and the Director of National Intelligence to come up with a plan to counteract risks posed by the development of blockchain tech by foreign adversaries.
“Within the next decade, every American will have sensitive, private data stored using blockchain technology, so China’s heavy investment in this infrastructure poses a colossal national security and data privacy problem,” Nunn said on Wednesday.
Along with banning Tether, the bill would also block officials from using The Spartan Network, The Conflux Network, and the architect behind China’s national blockchain project, Red Date Technology Co.
However, CLARITY is far from passing. Neither Nunn or Spanberger hold significant sway in the US House of Representatives, and their more established peers are already vying for their own crypto legislation to pass. It’s unlikely that this bill will enter law for the foreseeable future, if at all.